PRESENTATION MINING 2010 RESOURCES CONVENTION - BRISBANE

Transcription

1 27 October 2010 ASX: AOH, FSE: A2O PRESENTATION MINING 2010 RESOURCES CONVENTION - BRISBANE Please find attached the presentation to be made by Managing Director, Dr Alistair Cowden, at 4.40pm on Wednesday 27 October 2010 at the Mining 2010 Resources Convention in Brisbane, Australia. Please direct enquiries to: Alistair Cowden Managing Director Tel: altona@

2 Production at Outokumpu Growth from Roseby Leverage to Copper 27 October 2010 Alistair Cowden Managing Director

3 Regulatory and Compliance Disclaimer This presentation and information contained in it is being provided to shareholders and investors for information purposes only. Shareholders and investors should undertake their own evaluation of this information and otherwise contact their professional advisers in the event they wish to buy or sell shares. To the extent the information contains any projections the Company has provided these projections based upon the information that has been provided to the Company. The Company does not make any representations as to the accuracy or otherwise of that third party information. Competent t Person Statement t t The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled and reviewed by Dr Alistair Cowden BSc (Hons), PhD, MAusIMM, MAIG, Mr Jarmo Vesanto, MSc, MAusIMM, Mr Seppo Tuovinen MSc, MAusIMM, Mr Maurice Hoyle BSc, MAusIMM and Mr Jani Impola, MSc, MAusIMM, who are full time employees of the Company and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Messer's Cowden, Vesanto, Tuovinen, Hoyle and Impola consent to the inclusion in the report of the matters based on their information in the form and context in which it appears. Metal Equivalence Metal equivalence equates the contributions of various metals to revenue from concentrates as if they were copper. Metal prices are Cu US$3.00/lb, Co US$17.00/lb Zn US$7.75/lb Ni US$8.00/lb Au US$1,000/oz. Metal values are adjusted to reflect concentrate sales terms and differing metal recoveries; Cu 100%, Co 50%; Ni 60%, Zn 60%, Au80%. ASX Releases Detailed Resource and Reserve statements can be found in Vulcan ASX releases dated 23 October 2009 and 16 November 2009 and Universal ASX releases dated 21 October 2009, 23 July

4 A$m) Attractive Valuation (A$) market capitalisation/tonne of copper equivalent Resource 700 1, ,572 EV/Resource (A$/t Cu Eq.) Market Cap (A$m) 600 1, EV/Resource (A$/t Cu Eq.) Market Cap. ( Altona Metminco Discovery Aditya Exco Rex Finders Tiger Cudeco Citadel Sandfire

5 Two Clear Goals Building a copper mine in Finland: Outokumpu project will produce 8,000tpa copper, 8,400ozpa gold from first half 2012 with growth through satellite mines and cobalt-nickel revenue Building scale in copper in Australia: Roseby project already contains 0.9Mt of copper metal, we are targeting a step change in the Resource and proposed production of up to 40,000tpa 000t Successful delivery of this strategy will deliver a significant re-rating of market capitalisation 4.

6 Why Copper? A step change in copper markets in 2005 Low price level due to high inventories and at times production surpluses High price level due to strong rise in China s demand, insufficient production output and low inventories $6,731 $7,126 $6,952 $7,290 $5,164 $3,684 $2,868 $1,714 $1,577 $1,558 $1,780 Average of 1st half of decade: 1,919 Average of 2nd half of decade: 5, [Source: Aurubis]

7 Corporate Snapshot (ASX: AOH, FSE: A20) Strong share price performance since announcing go ahead at Outokumpu Shares on issue 245.3M 53 Market 26c A$64M Options ($1.50) 1.5M Cash A$10M Converting notes* A$14M Liquidity ASX: 800,000/day FSE: 200,000/day 000/day * Notes can convert prior to June 2011 maturity at $1.80/share. Convert automatically at maturity into shares at the 5 day VWAP or at $1.80 /share if the share price is $1.80 or greater 6.

8 Outokumpu Copper Project Luikonlahti Plant 7.

9 Stable, Skilled Mining Jurisdiction 26% corporate tax rate, no mining royalties Supportive government, potential financial assistance Strong performing Euro zone economy, low sovereign risk Major mining, smelting equipment industry Big players: Agnico Eagle, Anglo American, Inmet, First Quantum, Talvivaara and Western Areas 8.

10 Mill and 9 Satellite Deposits 9.

11 Kylylahti Mine Site Old Talc Pits Old Talc Waste Dump Power Line Portal Site 10.

12 Luikonlahti Processing Hub 11.

13 Key Metrics 550,000 tpa of ore at 1.6% Cu, 0.7g/t Au Decline mine, longhole open stoping, cemented waste fill Clean copper-gold concentrate and zinc concentrates - Copper: 8,000 tonnes pa - Gold: 8,400 ounces pa - Zinc: 1,600 tonnes pa 940tpa cobalt and 450tpa nickel (US$50m of metal pa) to temporary concentrate storage 12.

14 Outokumpu Highlights Luikonlahti Shaft and Plant 8-9 years mine life - growth at depth and from satellites Granted licences and permits Established plant and infrastructure at Luikonlahti 8,000tpa copper,8,400oz, pa gold Low capital cost of US$39m Readily marketable copper-gold and zinc concentrates Potential revenue stream from cobalt and nickel DFS July 2010, construction commenced 13.

15 Robust Economics US$ NPV (US$3/lb copper) 80M IRR 37% Average EBITDA 29Mpa Capital cost: - mill & tailings refurbishment 12M - mine infrastructure and decline 27M Total 39M Mill operating cost 10/t Mine operating cost 33/t Operating cost per pound copper after credits 1.33/lb 14.

16 What next in Finland? Road construction at Kylylahti mine site 15.

17 Project Plan and Potential Growth Acquire Mill Feasibility Stage 1 Mine Construction Mill Refurbishment Production Stage 2 Cobalt Product Feasibility Plant Construction 2 nd Mine Feasibility Mill Expansion Feasibility Mine Development Construction Production Production Exploration - Kylylahti Deeps, Saramaki, Valkeisenranta 16.

18 Mt Isa World Class Mineral Field World class deposits of copper, gold, lead, zinc, silver, uranium Majors have significant presence: BHPB, Xstrata, Ivanhoe, MMG Established work force, infrastructure, major mines and smelters Altona has key strategic tenement position (2,000km2) 17.

19 Roseby - Leverage to Copper 100% owned 900,000t copper resource Largest copper inventory in Australia not in the hands of a major Xstrata exploring for big deposits at depth with option to purchase 51% at independent market valuation Xstrata option expires in June

20 Advanced Development Project DFS for 5Mtpa, 26ktpa Cu operation completed in 2009 on 3 of 12 resources Native title agreement in place Environmental permitting well advanced Resource of 132 Mt at 0.7% Cu, 0.1g/t Au Reserve of 48Mt at 0.7% Cu, 0.1g/t Au Study used A$ 7,346/t Cu for an NPV of US$123M and 20% IRR Numerous opportunities for optimisation of project Little Eva Ore 19.

21 Reserve Upside: Little Eva Pit constrained by US$2/lb Cu price Resource constrained by 0.3% Cu cut-off grade Potential to bulk deposit and capture significant intercepts outside pit design 20.

22 Roseby Big Resource Potential 3 Reserves, 9 Resources and many yprospects p and workings No serious exploration expenditure for 15 years Resource is already equivalent to a 4.8m ounce gold deposit* Little drilling deeper than 100m All deposits open, many targets for extensions 235m at 0.45% Cu 172m at 0.70% Cu 194m at 1.50% Cu 5KM 21.

23 Exploration Upside: Blackard Xstrata alliance has delivered a largely untested new discovery beneath large oxide Resource 46Mt Resource 22.

24 What is the way forward for Roseby? Drilling by Altona on extending deposits Drilling by Xstrata beneath Blackard Systematic prospectivity analysis and drill deposit extensions and targets Target a 200Mt Resource Investigate a bulk tonnage operation at 8Mtpa for 40ktpa Cu Old copper workings at Roseby 23.

25 Altona Outstanding Copper Inventory Millions 2.0 Outokumpu Project Roseby Project 1,285,000t 1.5 1,053,000t 000t ,000ozs Copper Gold Copper Equivalent* (Tonnes) (Ounces) (Tonnes) * See disclaimer 24.

26 Altona in Six Months Outokumpu Decline mine tunnel underway Process plant refurbishment underway Financing completed Offtake (concentrate sales) agreements completed Roseby Xstrata drilling completed Altona drilling completed Resource upgrade pending 25.

27 Altona MINING LIMITED The Best Positioned Copper Play - Cash - Imminent production - 100% owned plant - Unparalleled metal inventory Keretti Mine, 1940 s 26.